MOSCOW, November 9. /TASS/. Russian Central Bank Governor Elvira Nabiullina stated speaking in the State Duma that there should be no rush to lower the key rate, as doing so could harm the economy.

She called sharp growth of prices the most unfair of all possible types of taxes.

TASS has collected the main statements by the regulator’s chief.

State of Russian economy

The Bank of Russia carefully assesses the impact of its decisions on the real economy to avoid causing it to cool down too much: "Like any other central bank, we carefully assess the impact of our decisions on the real economy, precisely to ensure that this does not happen."

Rising unemployment, a decline in real incomes of the population, and inflation falling below target levels could indicate overcooling in the economy: "Currently, there are no signs whatsoever to suggest that the economy is overcooling."

It is important not only to lower inflation but also to avoid hindering the economy from building its potential.

Rapidly rising prices are the most unfair form of taxation one could imagine: "I can only emphasize that of all possible taxes, a sharp rise in prices is the most unfair one, hitting the most vulnerable people."

Factors influencing key rate

The loss of economic capacity is a temporary phenomenon; its recovery will create room for a reduction in the key rate, among other things: "Attacks on our oil refineries, other industrial facilities, data centers, and logistics hubs have constrained production capacity. We believe this is a temporary situation, as both the business sector and the government are making tremendous efforts to restore the affected facilities. As long as this recovery process remains incomplete, demand should grow at a moderate pace. There is no question of a decline in GDP, but excessive growth in demand under current circumstances could accelerate inflation, which is necessary to avoid. As production capacity is restored alongside a steady rise in labor productivity, which is important, this risk will diminish, creating room for further easing of monetary policy and a reduction in the key rate."

The period of tight monetary policy is a necessary stage on the path toward low interest rates, which must be followed to its conclusion: "The period of tight monetary policy that we are currently experiencing is a necessary step toward low inflation and moderate interest rates. In this regard, our country is by no means unique, and this path must be followed to the end."

Central Bank’s plans on key rate adjustments

The Russian Central Bank’s key rate will decline in 2027, but it will remain in the double-digit range throughout the entire year in the regulator’s baseline scenario: "We are firmly committed to reducing inflation and bringing an end to the period of high inflation. <…> In our baseline scenario, [as outlined] in Monetary Policy Guidelines, the key interest rate will remain in the double-digit range throughout the entire coming year, though set to decline."

There is no need to rush into lowering the interest rate as doing so could harm the economy: "It is too soon to rush into cutting the key rate. That would lead to the opposite of the intended result: an increase in interest rates across the economy, rising prices, and new difficulties for our businesses, which already face plenty of challenges as it is. Starting everything from the beginning is not just something I’d prefer to avoid, it would be an unforgivable mistake."

Faster growth in supply will allow for a more rapid reduction of the key rate: "The supply of goods and services needs to grow more rapidly for the gap between the demand for and the supply of goods and services to close more quickly, so that we can lower the key interest rate faster."

Labor market

The labor shortage in the Russian economy has eased somewhat. However, there are no signs that it will disappear completely in the foreseeable future: "Yes, the labor shortage has eased a bit, as has been shown by surveys, but there is no indication that it will vanish entirely in the foreseeable future <..>. We will indeed have to reckon with the labor shortage, as it acts as an objective, physical constraint on increasing production. We see this not only in the statistics but also in our monthly surveys of businesses."

Labor market flexibility and a more active reallocation of the workforce are essential prerequisites for productivity growth in Russia: "Labor market flexibility and a more active reallocation of the workforce are an integral part of the structural transformation of the economy, a necessary condition for the growth of labor productivity."

Crediting

The growth of credit should remain moderate in 2027, at roughly the same level as this year.

The 8-9 point gap between the inflation rate and the Central Bank’s key rate reflects the persistence of inflationary pressure and the large share of subsidized loans: "In short, this 8-9 point gap reflects two factors currently present in our economy, factors that are not found in all countries with which we are compared. <…> The first factor is the duration of inflationary pressure. <…> The second factor, which sets us apart in many respects, is the high share of subsidized loans."

Protection of investors

Frozen assets remain a focus for the regulator, with a significant portion having been returned to investors: "The issue of frozen assets remains a focus for us. We managed to return a significant portion of assets to our investors through various means (such as replacement bonds, etc.). We are working on this continuously and will continue to do so."

Protecting the rights of minority shareholders is important; the capital market consists primarily of individual investors, and their investments must be safeguarded.